ORDER-2021-2 : An Order amending Chapter A, Article II of the Administrative Code of the City of Melrose by inserting a new Section A-222 as set forth herein

Transcript (~29 min @ 31:30)

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▶ 31:21 Jeff McNaught: yes president Grigoraitis yes moving on to the next order is 2021-2 in order amending chapter a article 2 of the administrative code of the city of melrose by inserting a new section

▶ 31:42 Jeff McNaught: and Ms. Gaffey, can I hear from you on this?

▶ 31:46 Speaker 4: I'm happy to take it from here. My name is Denise Gaffey. I'm the Director of Planning and Development. I did prepare some slides. I'm going to attempt to share my screen.

▶ 32:01 Speaker 4: Am I happy to do that, Kristen?

▶ 32:06 Speaker 1: You should. Here we go. Okay. Privileges.

▶ 32:30 Denise Gaffey: All right. Again, Thank you very much for inviting me to be here to speak about, you know, affordable housing fund proposal. It has been on our radar screen for many, many years. Really, as early as 2004, when it was first mentioned in the visionary zoning regulations back when they were created initially in 2004. So, the particular mechanism was for the financial contributions that would be generated by that tool and a goal of our recent master plan.

▶ 33:13 Denise Gaffey: So, it's something we're really excited to see come to fruition and also it's. Frankly, just considered a best practice. For in in housing planning and. So, we're, we're delighted to have this conversation and I have put together. These slides that pretty much go through some of the mechanics of the trust documents that you've that you are hoping on. So I'm going to just proceed to go through that and. Articulate some of the highlights. So, the, this, the, the proposal in front of you to adopt the established and affordable housing trust fund. Has this particular purpose in it and the purpose of the trust fund is to provide for the creation and preservation of affordable housing. Within the City of Mello to provide greater diversity and racial equity. For the community, and for the benefit of low to moderate income households, in accordance with the provisions of mass general law. Chapter forty four section fifty five. So that is the overarching purpose of the trust. And it is very much modeled on the state statute, the general law of chapter forty four section fifty five.

▶ 34:42 Denise Gaffey: Okay, so just in terms of very quickly a little bit of context. And again, we went ahead and referred to some of these statistics, but 23% of Melrose's 11,300 households are low income. 27% of households are cost burdened, which means that these households are spending more than 30% of their income on housing. And currently, there are only enough feed restricted affordable units in Melrose to provide housing for 36% of low income households. So, so this is just sort of broadly some of the needs. And there's a lot more we can. A lot more research to be done in terms of digging into the statistics here in Melrose, but we all know anyway, anecdotally. and that the housing prices are have been rising in recent years and it makes for difficult affordability issues in general. Just a little bit of background, housing trust funds in Massachusetts are for the most part municipal entities are focusing on creating and preserving affordable housing. Housing trust funds were first developed in the 70s but more actively pursued by communities after the municipal affordable housing trust fund statute again chapter 44 section 65c which was established by the state legislature in the year 2005 and that statute simplified the process for establishing a local housing trust before that time it had involved a home rule petition and it was very cumbersome um and since that statute was created we now have over um we We now have one hundred and ten housing trust in the state and quite a few. This is not it. This is not a unique tool by any means. On this slide, I've just. I pulled out some of the primary powers of the trust, and there are quite a few powers that are. That are provided for in the state statute. There are a total of. 16, I believe, and these are just, these are some of them and I've listed some of them here. Um, and if you're following along with the actual order, this is section C of the order. Which outlines all the authorities and responsibilities of the trust. And I'm not going to read through this whole list. You can read the list. While it's on the screen, but I, I believe for the most part. making funding distributions will end up being the primary power that we know the formal housing trust um ends up taking on because we don't see that there's an opportunity for a lot of funding over in over time so um that's my suspicion is that's the primary way that the funding will be the funds will be used but there are quite a few expansive powers um that are allowed in the trust. And here's just an example of some housing trust initiatives. Providing financial support for construction or affordable homes by private developers. Providing funding to help rehabilitate existing homes to convert units to affordable housing. Increasing affordability and new housing developments. For example, Like Dana mentioned, establishing a down payment assistance program, that is something certainly that the housing trust could decide to do with the funds. Some other examples that we see from other communities and other trusts include developing surplus municipal land for affordable housing or preserving properties that might have expiring affordability restrictions um and finally uh supporting um providing rental assistance for low and moderate income households um so this is this is obviously a really important component here the when we talk about the board of trustees um and the way it has been drafted the mellors affordable housing trust fund has been drafted the we envision five trustees um there could be anywhere between five and nine based on the statute but the the thinking was here that we would have five trustees and that one of them is required to be either the mayor or the management there are no other specific requirements in the statute although you know in terms of best practices trustees should you know it's recommended that trustees have experience in affordable housing development, real estate development, banking, finance, real estate law, those types of those types of backgrounds. The appointments are all made by the mayor and approved by the city council, so before any action takes place with this trust, the board of trustees needs to be established and the city council will of course again be making those making those appointments. um the terms are set at two years and they're scattered and um and another best practice you can certainly choose to the mayor could choose to appoint or designate members from other boards and municipal entities but that's not not a requirement it's just something other trust boards have done um and i put up this slide because um there are quite a few different ways that the trust um can be funded um this is a pretty exhaustive list of many different types of funding mechanisms um i think we're we're we are we suspect that the funds are for the most part going to come from inclusionary zoning payments because that is the mechanism right now where where the city has accepted funding for the purpose of affordable housing there is in other In other words, there's no plan, there is not an attempt through creation of this fund to try to, at this time, adopt a Community Preservation Act, for example, or even consider any of these other tools. I'm simply mentioning that there are other potential sources of funding for a trust going forward. And communities throughout the Commonwealth have used some of these different sources. Probably with the CPA being the most most common 1. Um, and in terms of affordable zoning and Melrose, I mentioned the affordable housing incentive program that's been in place since 2004. Been extremely successful where we. I work with developers who come in and propose market rate development and make sure that a certain percentage of the market rate projects. Have affordable units and we've created over 120 affordable units through that process. The goal has always the goal originally from 2004, continuing to this day has been to create units. The planning board always prefers. To create units, but there was an understanding when the zoning was adopted in 2004 that there may be some. Instances where an incentive unit that they allow for. May may not be feasible. In other words, are the way our zoning is structured. Is for every affordable housing that's contributed. The developer gets an additional market rate housing unit. And for the smaller projects we found, we have found. That that's not always feasible. It's not possible on a. with a project of eight units to add a nine unit sometimes there's just not space to do that so in those instances the planning board has used its discretion and allowed a developer to contribute um to make a financial contribution to the fund and um it's very rare in fact since since 2004 and over 16 years we've generated um 237 000 which is a which is a lot of money in the aggregate but it has taken a long time to get to that point to generate those kind of funds um in in 2009 a year ago we were in front of the um city council board of alderman at the time and this was after the planning board had spent quite some time um proposing and studying an amendment to our affordable housing program as many of you know that resulted in changing the percentage contribution from 10 to 15 for um for affordable units and also at that time the planning board spent a lot of time thinking about whether they wanted to um eliminate the monetary contribution altogether just again because it didn't really um it was always considered more advantageous to have units as opposed to the funds um but we landed in a place um where we allowed for or require i should say monetary contributions from the really small developments like five to seven units and also we created a new mechanism where if an affordable housing calculation results in a fraction less than one half percent then that difference that that fractional difference becomes a monetary contribution and if the fraction is over one half of a percent it actually um it um reverts to another unit so we bound up but in instances where it's less than half there is now a new mechanism to allow for to require the financial contribution so so as a result we we now have um a mechanism to continue to fund um this the trust fund going forward which was a little bit unclear back in early 2019 whether we would actually continue to allow for that but all that to say it puts even more importance on creating this trust now and so finally these are some next steps once the council establishes the affordable housing trust And then appoints the board of trustees. That would be the next step. But the trustees will also execute a declaration of trust, which will establish their authority and also their rules and regulations. So, many of the items that you saw earlier, all of those different powers that were enumerated in the statute. I suspect that once the trust rolls up their sleeves and starts to really take a close look at what the city's needs are, they'll be narrowing it down that list considerably. And that's what would end up getting included into the declaration of trust. It's obviously very important for trustees to become very familiar around local housing needs for this trust fund to be the most impactful that it can. And so, coincidentally, we actually are also embarking. I'll be talking about this in the appropriations community this evening. But we happen to be embarking on a housing production planning process. Right now as well, which will be a really robust. Planning process around housing production and affordable housing a very deep dive into. The communities, the needs that we see in the community and. what the community sees as a vision going forward. And this is gonna be a really terrific opportunity, I think, for this new board of trustees to use this information, to provide a vision and to shape the goals around the Equitable Housing Trust. So enabling them to create this action plan, which will help focus their efforts over the next one to five years. With that, thank you. That's pretty much it and I'm happy to answer any questions you have.

▶ 47:17 Jeff McNaught: Madam Clerk, there we go. I can see everyone. I haven't seen any hands in the queue for anyone who has any questions for Ms. Gaffey. Councilor Migliorelli.

▶ 47:31 Leila Migliorelli: Thank you, Chairman McNaught. Thank you, Ms. Gaffey. The presentation was really helpful and hopefully made my other counselors give them some background into the importance of creating this trust um i uh president gregoryce and i had put forward the order to accept the statute um based on i think the information you had shared with us the fact that many of us i know heard while campaigning last year the importance of increasing affordability in the city um and now as we're heading you know we're in a pandemic and and do um you know some dire economic situations um we're gonna find that you know people are gonna have a hard time you know reporting here living here staying here um but beyond all of that i think the fact that this was a priority in the master plan and there are already funds set aside that can't be used for any other purpose i think just from a fiscal perspective um it makes sense to put these funds into good use so um i you know i will be supporting this order and um i hope my fellow counselors will follow in suit thank you

▶ 48:37 Jack Eccles: Thank you, Ms. Chairman. I concur with Councillor Migliorelli that this is very important and that there's a lot of staff about, you know, cost per household and any small-stakehold would be good. I do have one question for Ms. Gaffney, which is kind of like talking about the money that we're taking in now expect that $230,000 that's going to transfer in do you expect there to be more money we did us change in the way that's going to be coming in are we going to be collecting more or from different avenues

▶ 49:15 Denise Gaffey: that requires a financial contribution for small projects and also requires contribution for that less than half fractional computation so um we we absolutely will continue to fund it um not not huge dollars it would i don't expect the pace to be any that much more dramatically dramatically different than what we've seen over the last 16 years um but you know it is it is an ongoing

▶ 50:03 Jack Eccles: funding source and sort of those projects i just just promote those projects pay in perpetuity do they pay when they're developed they kind of have an annual pay-in oh no it's it's the fee is

▶ 50:13 Denise Gaffey: calculated um usually when they're getting uh their certificate of occupancy so um sometimes if it's you know break it out based on the number of units it might be done with closing on each individual unit but usually it's just based on a certificate of occupancy um for for a development

▶ 50:36 Jack Eccles: awesome and then and then one last question you had said that um we allow people to it is there an option where you say you know you there isn't you can't take advantage of this whenever you

▶ 50:50 Denise Gaffey: have to build the affordable units it's that so yeah so we there used to be a lot more of a gray area there it used to be um before we amended the zoning in 2019 it was um the language was a little bit fuzzier and developers would try to appeal to the planning board to make the contribution as opposed to build the unit they very increasingly you know found a sympathetic ear because we know that the unit it's just so much harder to create the unit with the funds As to getting units, so. So, we no longer have, we have very, we don't really have any discretion anymore. That was 1 of the reasons we met. That was 1 of the. Consequences 1 of our goals with the amendment was to eliminate the discretion. So now, if it's a. If it's a development, that's 5 to 7 units, it has to be a cash contribution. Or if the calculation is less than half. know you might be giving one unit and then some cash but there's no instances where a developer can say oh you know you know if they're building 10 units can we just give you the cash instead for the one unit that's that's not allowed anymore at all there's no discretion there

▶ 52:01 Jack Eccles: that's good to hear awesome um well thank you i'm i'm supportive of this and i i look forward to

▶ 52:11 Jen Grigoraitis: its implementation president Grigoraitis thank you chairman mcnaught thank you ms gaffey and i apologize for this cameo appearance that my six-year-old just made um he's very passionate about both affordable housing and having his mother put him to bed um i just i am hugely in support of this and think this is the critical next step for us as a community but i was also hoping ms gaffey you could just clarify for all of us that we as a city have not yet met our affordable housing threshold which continues to leave us vulnerable to the to unfriendly 40 b's like we have um experience recently with the swains pond development um so just i just because i see this as another the more ability we have to be strategic and how we think about affordable housing um i think the better for us as a community versus being put in a position where we were we were in where we were trying to kind of fend off a development that we didn't really think was the

▶ 53:08 Denise Gaffey: right fit for this community um sure absolutely and i'm sure i'll be talking a little bit more about this too in the next committee meeting um regarding the housing production plan because that's a really important aspect of the hpp the plan um but you're correct we in belrose we are we have not reached the 10 um affordable housing uh goal that the state has required for all municipalities we are um we're at seven percent i believe um we made a lot of we have made a lot of progress over the years on through many of these different initiatives that we've had but it is it is pretty tricky to get to that 10 percent um and we need as many tools in that toolbox as we can as we can in order to do that so this is you're correct this is another opportunity for us um to try to get closer to that to that goal thank you okay uh i'm just making note that

▶ 54:09 Jeff McNaught: i believe we have to gavel into our council meeting in six minutes but i'm gonna call on

▶ 54:20 Mark Garipay: council Garipay next thank you mr chairman um i'm not sure if this is for ms gaffney or uh or um mr van campen quick question uh ms gaffney you had mentioned that this has been in the works for um a number of years other than the zoning change that you mentioned in 2019 are there any other changes from the original version of the trust that um that are in the one presented for us or is it kind of the original original one that's been in the works for a number

▶ 54:49 Denise Gaffey: of years uh no this is the first initiative um the city has made formally to create the trust

▶ 54:54 Mark Garipay: okay um and one other question uh like other commissions and boards we have i know the uh i know this is an it's independent uh um trust will there be a line item at all in the budget for the uh the board or will it um will everything be funded uh through for the board through the trust i know um when they hire somebody i know in some in some instances in some commissions and boards we have line items uh in the budget for them and i'm wondering if there will be a line item budget for this board whatever it may be i'm not sure of the answer to that okay okay

▶ 55:35 Mark Garipay: thank you um i just want to say i'm i'm not a voting member of this committee and i um i will be voting in favor of this if it looks like it's going to pass so uh i will be voting in favor of

▶ 55:53 Speaker 6: this in the full community thank you did i miss thank you council mcmaster thank you mr chairman

▶ 55:59 Shawn M. MacMaster: i'm a non-voting member of this committee i do support the order but just add some uh operational questions the first uh miss gaffey is uh first thank you for all for being here um and thank you for your presentation miss gaffey the first question relates to the housing needs assessment that is mentioned um as a bullet point in one of your slides uh what is the plan to pay for that needs assessment and what would that really look like okay so um again i'll be getting

▶ 56:28 Denise Gaffey: into this in a little more detail in our in the appropriations community that's coming up right after this because we just received a grant um and um to do a housing production plan and that needs assessment is a huge part of the plan so it's included in that grant funded effort there'll

▶ 56:49 Shawn M. MacMaster: There'll be no cost to this. Okay. And as we all know, developers are limited in terms of really the ability right now to build in the city because of space or scarcity of space. And based on some, some changes that have been made by the console, the planning board, we're limited in terms of our ability now to bring in revenue to the trust fund. So, I'm wondering what really is the plan, if any, to ensure that this is something that becomes sustainable over time.

▶ 57:23 Denise Gaffey: I think that's a great question. I do think it does help that we met when we mentioned the zoning. We did allow. We did allow for ongoing funding, but that, of course, depends on developments occurring. So, which we, by the way, have not seen any let up and I should say, despite the pandemic, there's still a lot of. There's a lot of business, but, um. But you're right, I think I think that's going to be something that the trustees are going to have to wrestle with. And I think they're going to have that will that will feed into their decision about how they. Structure how they actually do create their declaration of trust and how they structure.

▶ 58:10 Shawn M. MacMaster: Your responsibilities, I think they'll have to have that in mind. It looks like there is some discretion where the council can. Perhaps find some opportunities for revenue in terms of sustainability and Mr. then camp and I don't know if you're prepared to answer this, but maybe something to look into is whether or not there are opportunities. Um, with developments that may have to contribute or not may have to contribute, but permitting fees, other fees, I think, and I think I'm already furniture where the city took in about 850,000 dollars. If there, if we have any legal authority to. Require a developer through a city ordinance to perhaps contribute a percentage of any and all permitting fees. So, I'm not sure if that's if you're prepared to answer that, if not, if that's something that you might be able to look into in terms of our ability as a council to find ways through through an ordinance or ordinances. where we may be able to garner additional revenue in light of some of the limitations that we currently have.

▶ 59:20 Jeff McNaught: Yeah, and I think it's certainly something to look into, Councilor, for purposes of today's meeting. I'm sorry, can I pause, everyone? I think we're gonna have to recess for a moment. I'll entertain a moment for recess. We just have to gavel into our council meeting and then we can come right back to this.

▶ 59:37 Speaker 5: Motion to recess.

▶ 59:39 Speaker 2: Second.

▶ 59:40 Jeff McNaught: Motion to recess by Councilor Eccles, seconded by Councilor Migliorelli. Madam Clerk, will you please call the roll?

▶ 59:50 Speaker 6: You're on mute.

▶ 1:00:08 Speaker 1: Chair McNaught?

▶ 1:00:10 Speaker 6: Yes.

▶ 1:00:11 Speaker 1: Vice Chair Tramontozzi? Yes. Chair Sinella, I mean, sorry, Councilor Sinella? Yes. Councilor Eccles? Yes. Councilor Migliorelli?

▶ 1:00:22 Speaker 9: Yes. Yes.

▶ 1:00:26 Jeff McNaught: Okay, we're in recess. Take it over, Prez.